HomeNewsPowerGen-Houston talks collapse

PowerGen-Houston talks collapse

PowerGen-Houston talks collapse

Merger talks between PowerGen of the UK and the USA-based Houston Industries have been called off. Differences over how the companies would be valued in a deal are the main reason for the collapse.

The merger would have created one of the world`s largest electricity companies. Talks first emerged in May this year but last month began to stall over a number of issues. Other issues, such as management positions and the structure of the new company are thought to have been resolved.

The companies had agreed to create a holding company which would have had a market capitalization of around $17bn and a dual stock market listing. PowerGen is thought to have had concerns over possible ownership restrictions in the USA, and Houston was concerned about tough regulatory conditions in the UK. PowerGen`s recent à‚£1.9bn ($3bn) acquisition of East Midlands is also thought to have complicated the issue.

According to analysts, the collapse of the talks with Houston is unlikely to prevent PowerGen looking for other global partnerships.

Previous articlePEI Volume 6 Issue 7
Next articlePEI Volume 6 Issue 8